Top Court Limits Retroactive Increases

Facts: The DHCR granted landlord's application for MCI rent increases. Tenants appealed, claiming that the rent increases shouldn't be added to their base rents. They claimed the increases should be temporary, lasting only until the MCIs were paid for. Tenants also objected to the amount of the rent increases. Although prospective rent increases were limited to 6 percent per year, the DHCR allowed landlord to add on retroactive rent increases of up to 6 percent. An appeals court ruled for landlord, and tenants appealed to the state's top court. Court: Landlord can add the MCI rent increases as a permanent part of tenants' base rent. But landlord can't collect more than 6 percent each year, including the retroactive rent increases. The DHCR's regulation is invalid because it allows landlord to collect up to a 12 percent increase in one year---6 percent permanently, plus 6 percent retroactively.

Bryant Tenants' Association et al. v. Koch: NYLJ, p. 28, col. 4 (12/9/94) (Ct. App. NY; Kaye, CJ, Simons, Titone, Bellacosa, Smith, Levine, Ciparick, JJ)